Question: Consider the single equationmodel Y Ze where Y and Z are both real-valued (11). Let b denote the IV estimator of using as

Consider the single equationmodel Y Æ Z¯Åe where Y and Z are both real-valued (1£1).

Let b¯ denote the IV estimator of ¯ using as an instrument a dummy variable D (takes only the values 0 and 1). Find a simple expression for the IV estimator in this context.

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